'Just look at the carvings," says Peter Tompkins, gazing out the window of his penthouse flat at the beautiful sweeping curve of St Pancras Chambers, his voice full of wonder. He's talking about the carved stone scenes that grace the top of the building's marble columns: along with medieval motifs such as dragons and angels, there are train directors in top hats, stations, locomotives and what could even be steam.

"Every scene is different," Tompkins says of these delightful tableaux of railway life etched into the side of a magnificent building that began life, in 1873, as the Midland Grand Hotel. "Look at the brickwork, too. The mortar between the bricks is just an eighth-of-an-inch thick. That's real precision."

Tompkins's excitement is understandable. The actuary, who works in the City, may well have the most thrilling address in Britain. "I look out, on one side, to the train shed," says Tompkins, who is originally from Liverpool, "and to Camden town hall on the other." From a Victorian delight, in other words, to, well, a modern-day horror. "I bought the flat as soon as I heard it was going to be possible to live here. I just had to have it." The flat, jokes Tompkins, could be described by a prosaic estate agent as a "'two-bedroom maisonette in a converted older property'. But when I tell people my living room has a ceiling 10 metres high, the picture begins to change dramatically."

Tompkins's penthouse flat takes up much of the main entrance tower of St Pancras. From next year, the first two floors of this wonderful salmon-pink building will form a 244-room, five-star hotel called Renaissance St Pancras. Above this sit 67 now-completed flats, of which Tompkins's penthouse is the jewel in the gothic crown. The creation of these apartments – some stretched over two floors or more, some housed in spectacular spaces such as the vertiginous clocktower that overlooks neighbouring Kings Cross station – was quite a headache.

"Has it given me sleepless nights?" says developer Harry Handelsman, founder of the Manhattan Loft Corporation. "Sleepless weeks and months, actually. The project did seem a bit daunting, and the planning stage was long. I mean, this is a Grade I listed building, a wonderful place – not something that could be converted on the cheap. It came as a big relief when the decision was made to divert Eurostar trains to here. St Pancras became more defined, with more cachet than it would have had without trains direct to Paris."

The celebrated renovation of St Pancras station, re-opened by the Queen in 2007, cost £800m. The price of the conversion of the Midland Grand into a hotel and flats by Handelsman and hedge fund manager Stanley Fink will be £200m. Having made his name converting interesting yet relatively small-scale city buildings into fashionable lofts, Handelsman was entering a whole new world when he took on St Pancras. Creating flats with as many mod cons as possible, in a building boasting giant gothic vaults that was last occupied 75 years ago, was always going to be tricky – especially with English Heritage, quite rightly, watching closely.

"I think there were just eight bathrooms for 300 guest rooms," says Les Broer, the South African-born architect who has worked on the project for the past dozen years. "We had to dream up ways of adding plumbing, wiring, heating, ventilation, lifts and other modern services, all without being able to cut into a single truss or beam. It's been a bit of a jigsaw puzzle."

The penthouse flats are highly theatrical spaces, their new floors, rooms, mezzanines and balconies threaded between spectacular timber roof frames. High-ceilinged bathrooms offer views – from the tubs themselves – through lancet windows across central London. Compromises were inevitable. The lifts are small: English Heritage would not allow Broer and his team to cut through or puncture any of the building's existing fabric. "There are several flats here with grand pianos," says Tompkins. "These had to be carried up, like every big piece of furniture, however heavy. It's 158 steps up to my flat."

'We've got lots of train loons'

Unsurprisingly, the St Pancras Chambers flats sold very quickly, mostly off-plan. It seems odd now to think of how unloved and threatened the Midland Grand was between its closure in 1935 (it was by then very old-fashioned) and its listing in 1967. To keep English Heritage happy, flat windows are single-glazed, so the restless, rumbling Euston Road feels closer than it might; there is, too, the trundling of underground trains. But then most of those who have bought here (there are just two flats left) were well aware of the nature of the building. And for many, it was a plus.

"There are some proper train loons living here," says Geoff Mann, a director of RHWL, the architecture firm behind the development. "The presence of the railway is a real attraction." He happily admits to being a "train loon" himself, having bought and renovated a railway station on an abandoned line in Scotland. (He even has his own working stretch of track, complete with locomotive.) "Well, you've got to be a bit of a nutter to get involved with St Pancras. The whole thing was mad in the first place, when old George Gilbert Scott designed it. It's utterly brilliant, though. Everyone living here is sharing a dream."

Tompkins would agree. "From next year, when the hotel opens, residents will be able to get room service. How about that? It's been a bit cold this winter, I have to admit; but how do you heat rooms with ceilings this high? Most of the flats have shorter rooms, yet they all feel pretty grand."

Grand is the word. Looking south from Tompkins's windows, a view that takes in the length of St Pancras, you can see the architectural references Gilbert Scott made to Winchester and Salisbury cathedrals, to Westminster Abbey, to the medieval churches of Venice, Lombardy and Milan, and to the great cloth halls of northern France. The whole has been realised in the best Nottingham bricks, along with Ancaster, Mansfield and Ketton stone, and red and grey granite.

Meanwhile, looking out to the north, there's St Pancras's stupendous train shed, a 19th-century engineering marvel designed by William Barlow and Rowland Ordish. And beneath it, of course, a champagne bar and those 300kph Eurostar trains. In short, there really is no address like it. It's a bit like being able to buy a flat in the Palace of Westminster, or the Law Courts on the Strand, London's two other monumental gothic revival masterpieces – only they're not for sale.

Tompkins takes another look out his window, at the buses, cars and taxis ferrying people into the restored station below him, and says: "Buying the flat was an act of faith as much as an act of love – love for an unmistakable and beautifully made building."